Disaster relief

February 24 2005

When President Bush got 1st District Rep. Jo Ann Davis' letter complaining about the National Flood Insurance Program, he probably knew where to put it: in a fat folder of complaints about the Federal Emergency Management Agency, which runs the program. By now, the folder is probably stuffed - and what should get the president's attention isn't just the volume, but the alarming letters from credible sources alleging problems that run the gamut from mismanagement to corruption.

Davis has been agitating since Hurricane Isabel hit town for more responsive service from FEMA. What spurred her to write to Bush is the fact that 11/2 years later, more than 100 Virginia families are still in temporary trailers, waiting on the insurance settlements they need to put their lives back together.

Hers is just the latest in a chorus of congressional representatives, citizens and consumer advocates calling for investigation and reform of the program. At the most innocuous, the problems they cite indicate a bureaucracy that fails to respond promptly and appropriately. At worst, what they allege is systematic fraud and a process that victimizes flood victims all over again.

Congress was so concerned that when it reauthorized the flood insurance program last year, it tacked on a provision directing the Government Accountability Office to investigate the adequacy of payments to flood victims and the practices of FEMA and insurance adjusters in estimating losses.

Davis earlier asked former Attorney General John Ashcroft to order a Justice Department investigation. She complained to former Homeland Security Secretary Tom Ridge that FEMA's review of Isabel claims was about as independent as asking the foxes to report back on henhouse security, since the review team was made up largely of the adjusters and firms that handled the claims in the first place.

Part of the problem, say critics, has to do with conflicts of interest and practices that stack the deck against flood victims. Many of the complaints deal with the private insurance companies that write the policies and the contractors that FEMA uses to train agents and adjusters and settle claims.

Here are some of the other allegations for the file the White House should be assembling, based on investigators' findings and testimony before Congress:

That insurance companies systematically lowball claims.

That prospective customers are promised one thing - that insurance will restore them to their pre-flood condition. But adjusters are trained that coverage is narrowly defined - and to limit settlements appropriately.

That the process penalizes victims who don't have the savvy to appeal their settlements and who take adjusters' decisions as final.

That the relationships among the agency, the insurance companies, and the contractors are in some cases conflicted, and the interests that win out aren't those of the people who are counting on their flood policies to help them recover from natural disasters.

In some localities, people who incurred real damage can't get money they deserve. In others, money is flowing to people who had no damage. According to news reports, emergency officials in Mobile, Ala., Detroit, Florida and eastern North Carolina are protesting payments to residents in their localities from storms that did little or no damage.

Here's what the FEMA Web site says: "Flood insurance can make you whole again." For some victims of Isabel and other disasters, experience gives lie to that claim.

Davis is right to push to find out why. It reflects poorly on FEMA and the Bush administration that getting answers is proving so difficult.


The extent of the frustration with FEMA is so great in some parts of Florida that an editorial in the Palm Beach Post observed that people have taken to calling it the Federal Evasion and Manipulation Agency.

Copyright 2005, Daily Press